Maximizing Returns: The 2024 Guide to HDFC Top 100 Funds' Power
Introduction
Developed by HDFC Bank on 01-10-1996, the distinguished HDFC Top 100 Funds list features the top mutual funds in India. It falls under the category of Equity: Large Cap. These funds have been chosen due to their excellent risk management, strong investment methods, and consistently good returns. Investors can pick the fund that best fits their investing goals and risk tolerance from various possibilities. This blog will assist you in navigating the world of HDFC Top 100 Funds and making wise investment decisions, regardless of your level of experience. So let’s have a flashback start with the 2013 financial year.
Since 2013, the HDFC Top 100 Equity Fund has generated an average annual return of 16.2%, which is higher than the 10.4% return of the Nifty 500 Index over the same period. High-quality stocks like HDFC Bank, Infosys, and TCS have been regularly invested in by this fund, and they have produced outstanding returns over time. likewise, since 2013, the HDFC Top 100 Hybrid Fund has generated an average annual return of 9.5%, outperforming the 7.4% return of the Nifty 500 Hybrid Index during the same time frame. This fund offers a balance between growth and stability through its investments in a variety of debt and equity instruments.
The Actual Magic: Portfolio
Given below are the allocation or distribution in different sectors,
|
Portfolio Allocation |
|
|
Finance |
34.6 |
|
Technology |
20.30% |
|
Healthcare |
14.40% |
|
Consumer Durables |
11.10% |
|
Capital Goods |
7.20% |
|
Real Estate |
6.60% |
|
Others |
6.10% |
As of March 31, 2023, the fund's portfolio is diversified across various sectors, with Finance leading the way at 34.6%, followed by Technology at 20.3%, Healthcare at 14.4%, Consumer Durables at 11.1%, Capital Goods at 7.2%, Real Estate at 6.6%, and Others at 6.1%.
The fund has consistently produced returns, with an average annual return of 14.7% since it began, thanks to this sectoral weightage. This shows that the fund can find and buy the top-performing stocks in a variety of industries, giving investors a well-rounded investing experience. But the question comes who is behind maintaining such good returns that is the Fund manager lets find out a bit about him
Let’s Take a Look at Who’s Behind this Successful Strategy
Mr. Prashant Jain is one of the most experienced and respected fund manager in the Indian Mutual Fund Industry, Mr. Jain has been managing the HDFC Top 100 Fund since it was launched in 2007 and has consistently provided remarkable returns over the years. Mr. Jain has been a key contributor to the fund's success and has over 20 years of expertise in the field. He has an in-depth knowledge of the Indian stock market. His ability to choose and invest in high-quality stocks has been demonstrated, and the fund has routinely outperformed its benchmark thanks to his skill in portfolio management and stock selection.
The Fund manager seeks out businesses with an ongoing edge in the market and effective leadership. This indicates that they are looking to invest in businesses that have strong leadership and a differentiator such as a special product or service that helps them stand out from the competition. And what about the risks how have they dealt with risks over such a long period of the fluctuating market?
Risk Management
The Fund's investment strategy is focused on choosing trustworthy companies with solid leadership and a competitive edge. The fund managers have a long-term outlook and would rather hold onto these selected companies than make frequent purchases and sales in an attempt to make rapid profits. The goal of this management strategy is to reduce risk while increasing the chance of long-term, stable growth and consistent profits. To put it another way, fund managers look for well-run businesses that have distinctive advantages. The goal of the fund is to reduce the risk of financial losses and lay the foundation for steady value growth by sticking with these companies over the long run.
Comparison
Let’s compare our fund with the category benchmark for better understanding to where the fund stands in the category. The points below briefly describe the comparison:
|
Fund |
HDFC Top 100 Fund |
NIFTY 100 TRI |
|
Investment Philosophy |
Focus on high-quality, well-managed companies with sustainable competitive advantages |
Focus on identifying leaders in their respective industries with a strong track record of growth |
|
Investment Approach |
Long-term, consistent growth and capital appreciation |
Dynamic, opportunistic, and focused on short-term market fluctuations |
|
Holding Period |
Long-term, typically 3-5 years or more |
Short-term, typically 1-3 years |
|
Risk Tolerance |
Conservative to moderate |
Aggressive |
|
Return Expectation |
Consistent, long-term growth |
Higher returns through short-term market fluctuations |
|
Top Holdings |
Typically a mix of large-cap and mid-cap companies across various sectors |
Typically a mix of large-cap and mid-cap companies across various sectors, with a focus on technology and healthcare |
|
Manager Tenure |
Typically 3-5 years or more |
Typically 1-3 years |
|
Minimum Investment |
Rs.5,000 |
Rs.1,000 |
Dividend Strategy
The HDFC Top 100 fund has a consistent track record of paying dividends to its investors. Here's a review of the fund's dividend pay-out history and frequency:
* Dividend Pay-out Frequency: The fund pays dividends every quarter, typically within 30 days of the end of each quarter.
* Dividend Yield: The fund has consistently paid a dividend yield of around 1-2% per annum over the past few years.
* Dividend pay-out Ratio: The fund's dividend payout ratio has been around 30-40% of its net assets, indicating that the majority of the fund's profits are distributed to investors as dividends.
* Dividend Growth: The fund has consistently increased its dividend payout over the years, with an average annual growth rate of around 5-10%.
With this, we move towards the end of the topic let's summarise it up
Wrap Up
To sum it up, One respected stock fund that has continuously produced outstanding long-term returns is the HDFC Top 100 Fund. The fund is a fantastic choice for investors looking to participate in the Indian equities market because of its track record of overcoming competitors and its benchmark. Risk is reduced and profits are increased because of its diversified portfolio of the top 100 Indian firms, which is decided by a thorough research process. The fund is a desirable option for investors because of its cheap expenses and low turnover ratio. All things considered, the HDFC Top 100 Fund, along with Online SIP, is a fantastic choice for investors looking for a diversified and disciplined way to participate in the Indian equities market.
